Development Partners International (DPI), one of the leading African private equity specialists with US$1.1bn under management, has through its ADP II fund concluded an investment and strategic partnership with Egypt’s leading household appliances and consumer electronics retailer, B.TECH, that will see the fund investing EGP300mn in the company.
B.TECH operates a fast-growing portfolio of 67 retail stores across 22 governorates in Egypt with a network of 362 wholesale dealers supported by three main warehouses and 57 after-sales service centres. B.TECH distributes leading household appliances and consumer electronics products including leading global brands such as Indesit, Ariston, Miele, Apple and Braun. B.TECH has consistently grown its business at an impressive 18% annualised sales growth over the last 5 years driven by growing demand for consumer durables and electronics from Egypt's middle class. Sales are supported by B.TECH’s market leading instalment payment system which has served over 700,000 Egyptians to date. B.TECH’s unique combination of physical retail, instalment payments, and a fast-growing online presence supported by an advanced warehouse and after-sales capability gives the business a dominant position serving customers across a broad demographic range.
Runa Alam, CEO and co-founder of DPI, commented: “Our investment thesis is to back strong companies which serve the developing needs of the emerging middle class across Africa. B.TECH is our first investment in Egypt and has a proven track record in serving the needs of the emerging and established middle classes. We believe the shift from traditional towards organised retail and the increasing formation of new households will support increasing consumption of durables and open new markets and channels for the business.”
Adding to this, DPI deal partner Sofiane Lahmar said: “ B.TECH has a strong track record of growth and profitability, an excellent management team, and a clear long term strategy. We are excited to partner with Dr. Khattab and his team and look forward to working together with B.TECH to continue the company’s growth story in Egypt and expand outside of Egypt in other African countries.”
Dr. Mahmoud Khattab, Chairman and CEO of B.TECH added: “B.TECH has grown over the last ten years to be the leading household appliances and consumer electronics retailer in Egypt with a distribution platform that is second to none. B.TECH’s unique integrated business model offers a strong value proposition to its customers in terms of range of products, affordability and accessibility across the country both offline and online. The investment and partnership between our company and DPI demonstrates the outstanding work accomplished by our team and highlights the growth potential of B.TECH in Egypt and Africa.”
Matouk Bassiouny and Norton Rose Fulbright LLP acted as legal counsel to DPI on the transaction.
B.TECH was advised by EFG Hermes, Zulficar & Partners and White & Case on the transaction.
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Notes to editors:
Development Partners International LLP (DPI) is a $1.1 billion Africa-focused private equity firm that invests in companies benefiting from the fast-growing emerging middle class in Africa.
Founded in 2007, DPI’s investment process combines rigorous analysis with comprehensive due diligence. The firm seeks out compelling investment opportunities and aims to obtain exclusive terms, rational pricing and strong influence. The investment philosophy places great importance on working closely with the funds’ portfolio companies to create value while looking for attractive exit opportunities throughout the lifetime of the funds investment. DPI invests in profitable or cash-flow positive companies which are growing either organically or through acquisitions, or partnering with established corporations expanding into new regions in Africa. The companies’ management must be experienced, and committed to transparency, with a clear corporate strategy designed to create value for shareholders.
DPI’s team has had extensive hands-on private equity and investment experience across Africa since 1990.
DPI currently advises two pan-African private equity funds, African Development Partners I (“ADP I”) and African Development Partners II (“ADP II”).
About ADP II
The second DPI fund which was oversubscribed closed in March 2015, at ~US$725 million, beating its $500 million target.
The ADP II investor-base includes corporate and public pension funds, endowments and foundations, funds of funds, family offices and development finance institutions from across the US, Europe, Middle East and Africa with significant interest from US investors, which currently make up just over 40% of its limited partner base.
ADP II is pursuing a broadly diversified strategy across industries that benefit from Africa’s growing middle class including the financial services, healthcare, education, construction, logistics, telecoms and consumer goods sectors in line with the existing portfolio of companies operating in 18 African countries across DPI’s two funds.
Some of ADP II’s existing portfolio companies include:
- Université Privée de Marrakech, a leading private university
- RTT, a leading logistics company in S. Africa
- HomeChoice , a home-shopping and credit retail company
- Eaton Towers, an African telecommunications towers company
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